A hospital peer review has the potential to seriously disrupt a physician’s medical practice, often bringing with it a cascade of legal consequences that can devastate a health professional’s practice and reputation. If you are a physician facing the prospect of a peer review due to allegations of unprofessional behavior or a standard of care complaint, the earlier you seek help from an experienced healthcare law attorney familiar with the peer review process, the better positioned you will be to protect yourself against these consequences.

An understanding of the process and its possible sequela is important for any physician faced with the prospect of a peer review. There is much more at stake for the physician than whether he or she will retain their ability to work at a particular hospital and many pitfalls which can catch the doctor unawares.

For example, if a physician resigns his privileges during the course of a hospital investigation, the resignation will likely result in a report to the National Practitioner Databank ("Databank" or "NPDB") , a national clearinghouse of information regarding physician misconduct. A report will also be forwarded to the Texas Medical Board which will then open an investigation leading to potential disciplinary action. The NPDB report, and possible Board order, will be visible to other hospitals where the physician holds privileges, and may result in yet further investigations. Any attempt to move on and gain new privileges will require an explanation of the report. Finally, the NPDB report will raise questions with insurance carriers, whom may attempt to remove the physician from their provider network.

The Investigation Stage:

Broadly speaking, the peer review process takes place in two stages: an investigation followed by a fair hearing.  The specifics of this process will be governed by the hospital’s medical staff bylaws which outline any right of the physician to participate in the investigation and the procedural details of the subsequent fair hearing.

Investigations are typically initiated by the hospital’s Medical Executive Committee ("MEC") following a poor patient outcome or complaints about a physician’s behavior or professional conduct. In some instances the hospital administration will also have the authority to open an investigation which will then be passed on to the MEC.

In cases where there is a perceived threat the physician’s continued practice would pose an imminent threat to the hospital’s patients or staff, the MEC may decide to immediately suspend the physician’s privileges pending further investigation. In addition to the severe damage such a temporary suspension inflicts on a physician’s practice and reputation, should such a suspension continue for more than thirty days, the hospital is required to file a report with the NPDB and Medical Board.   

If the MEC proceeds without temporarily suspending the physician’s privileges, the formal investigation process will begin and the physician will receive official written notice of the allegations. If the investigation is related to medical care, the MEC will likely send the relevant medical records out for external peer review by medical professionals in the same field as the physician. After these reviews are complete, the MEC or an investigative panel, made up of other physicians, will then interview the physician.

During the hospital’s investigation, the physician’s ability to actively defend against the allegations is usually limited. For example, the physician may be given little to no access to the relevant medical records. Likewise, the physician may not be allowed to speak with staff members who are potential witnesses to the issue under review. Additionally, the hospital will often restrict the participation of the physician’s lawyer during the MEC’s investigative meeting(s) even though the physician is typically asked to attend and answer questions.

When the investigation is concluded, the MEC will consider the evidence and make a recommendation. If the recommendation is to drop the allegations, the peer review ends. If, however, the MEC decides to modify, suspend, or revoke a physician’s privileges, the physician must be timely notified in writing of the proposed action, the reasons for this recommendation, and informed their right to a fair hearing. In Texas, physicians also have the right to attempt to mediate the dispute with the MEC and hospital.

The Fair Hearing Stage:

If the physician does not agree to the MEC’s recommendation, they may request a fair hearing. A fair hearing is usually conducted at the hospital before a panel of physicians who are also on the medical staff. Ideally, the panel should include one or more physicians in the same specialty. The panel should not include any doctor in direct economic competition with the physician being peer reviewed.  

A hearing officer, normally a lawyer, will be appointed to oversee the hearing. The hearing officer’s role is to resolve disputes between the physician and the hospital regarding the admissibility of evidence and hearing procedure and advise the hearing panel on other legal issues.  A hearing officer should also ensure that the hearing is conducted in compliance with provisions of the Federal Health Care Quality Improvement Act ("HCQIA"). The HCQIA requires the hospital to provide a physician certain due process rights, and a failure on the hospital’s part to provide these rights could result in the hospital and MEC losing its statutorily granted immunity from certain types of lawsuits.


Continue Reading An Overview of the Physician Peer Review Process and the Importance of Legal Counsel


For the past several years the Texas Department of Insurance-Division of Worker’s Compensation (TDI-DWC) has steadily increased the number of enforcement actions initiated against Designated Doctors serving the Texas worker’s compensation system. The results of such enforcement actions can range widely— from a requirement that the Designated Doctor (DD) complete additional training, the payment of a sizable administrative penalty, to removal of the physician’s Designated Doctor (DD) status. Most DD’s are likely aware of this trend as it corresponds with broader efforts by DWC to more tightly regulate the worker’s compensation process.

To accommodate this augmented activity the Division of Worker’s Compensation’s enforcement division has expanded its staff through recruitment from other state healthcare agencies, such as the Texas Medical Board. As a by-product of this hiring policy the DWC has adopted and modified many of the procedures commonly used by these other administrative bodies. This includes implementing an informal conference procedure which largely models that used by the Medical Board. Similarly, DWC Staff also frequently forward a proposed settlement agreement to a Designated Doctor prior to an informal conference or other adequate opportunity to respond to alleged deficiencies. This procedure mirrors that used by the Texas Board of Dental Examiners and Texas Board of Nursing.

A DD will often first become aware of a pending enforcement action through a records request from DWC’s enforcement division asking for all documentation still in the DD’s possession related to one or more specified patients. Alternatively, DWC will send the Designated Doctor official correspondence expressly notifying them an enforcement action has been opened, listing the matters being investigated, and ask for a response. Prior to providing a response, a Designated Doctor in receipt of such a letter from the Division of Worker’s Compensation should promptly contact an experienced attorney to discuss their case and determine whether it is advisable to retain legal representation. We have seen many clients unknowingly do irreparable harm to their case by submitting a response first and only seeking legal counsel after they receive a proposed resolution from the enforcement division.

The DWC can initiate an enforcement action against a Designated Doctor for a broad array of different reasons, including submitting Designated Doctor’s Evaluations (DDE) late, establishing a date of Maximum Medical Improvement (MMI) or Impairment Rating (IR) with which the Division’s Office of the Medical Advisor disagrees, or having an Administrative Law Judge subsequently overturn the DD’s findings in a hearing involving an injured worker. In fact, the kind of conduct, issues, errors, and omissions that can be considered a violation of the DWC’s Rules is vast and many may seem picayune to the physician or outside observer. Regardless, the enforcement division pursues each issue zealously and makes full use of DWC’s broad discretion to regulate its DD’s in seeking enforcement action.

Any Designated Doctor who has been targeted for a possible enforcement action by DWC should immediately contact an attorney experienced in representing clients before the agency. The risks of going it alone are substantial and the DWC does not shy from removing physicians as Designated Doctors, particularly not in the overactive regulatory climate which currently prevails. My firm has been very successful in achieving successful outcomes for DD’s before DWC and this includes physicians whom the enforcement division sought to have removed from the program. A vigorous rebuttal and/or remedial presentation by a lawyer experienced in advocating before the DWC can make all the difference in the final outcome.



A foreign physician coming to this country to pursue his residency is often faced with two visa options. He is typically required to choose either a J-1 visa or an H1-B visa. Both of these visas are "non-immigrant" visas, which do not entitle the visa holder to any permanent status in the US. For most foreign medical graduates, however, the H-1B visa is a better choice for physicians wishing to remain in the US after the completion of their residencies. 

From 1976 through 1990 physicians coming to the United States to provide direct patient care, including those coming to the US to do their residencies, could only come on J visas. While easy to obtain, J visas were particularly hard on physicians because of the 2-year foreign residence requirement – After finishing their residencies, doctors were required to return to their country of nationality or last residence for 2 years. In 1990, Congress changed the law and allowed foreign physicians, including those coming to do their residencies, to petition for H-1B visas.

Many residency programs prefer doctors to come on a J-1 visa because of their familiarity with this process and the fewer formalities associated with it. For instance, programs offering J-1 visas do not have to file a Labor Condition Application (LCA) with the Secretary of Labor. The LCA requires programs offering H-1B visas to make certain attestations, such as guaranteeing equal pay with similarly qualified US doctors; a violation of the LCA can leave the program exposed to fines and restrictions on employing foreign workers. 

Many foreign medical graduates (FMGs) also prefer coming on a J-1 visa because of the easier United States Medical Licensing Examination (USMLE) requirements.  J-1 foreign medical graduates need only pass USMLE I & II whereas H-1B visa seekers must pass all three steps. Additionally, a J-1 visa typically lasts the duration of the training program, whereas H-1B visas only last three years with a one-time extension of another three years, though in certain circumstances multiple extensions may be allowed.   

Requirements for Foreign Medical Graduates (i.e. foreign citizens who went to medical school outside the United States) to obtain an H-1B visa include:

  1. Completing Steps 1, 2 and 3 of the USMLE;
  2. Holding a license or other authorization to practice in the state of employment;
  3. Demonstrating English proficiency;
  4. Having an unrestricted license in a foreign state or documentation showing graduation from a  foreign medical school. 

Though seemingly less attractive than the J-1, the H-1B offers the huge benefit of allowing the foreign medical graduate the ability to apply for an immigrant visa (green card) and remain working in the country pending the determination of the application— once an employment-based immigrant visa petition has been filed, the H-1B can be renewed until such time the petition is decided on. The terms of the J-1 visa on the other hand requires the FMG to return to his country of residence for at least two years before returning to the US. 

In some cases, the J-1 two-year residence abroad requirement can be waived, but only by accepting employment in healthcare professional shortage areas or medically underserved areas. The number of waivers are very limited if granted by a state agency – 30 per state per year, making the waiver a risky proposition. Additionally, such a J-1 waiver only allows the FMG to transition to the H-1B visa – not directly to a green card. As a result, the FMG’s immigration process is further delayed.  Even if the foreign medical graduate on a J-1 marries a US citizen, the physician must still fulfill the two-year residence abroad requirement or obtain a waiver.  

Though some states, such as Texas and New York, enacted laws that neuter the H-1B’s benefits, see here, the severe shortage of doctors has required those states to rethink their laws. In 2012 a federal appellate court struck down the New York law discriminating against foreign doctors. Moreover, in June 2013, Texas repealed its law requiring H1-B physicians to work in medically underserved areas such as their J-1 waiver counterparts. As a result of these new developments, the H-1B remains the best option for a physician to pursue residency and eventually obtain permanent status in the US.   


The National Resident Matching Program (NRMP) is the non-profit, non-governmental organization that facilitates the annual “match” between medical students and residency programs. Created in 1952, it was implemented to make the process more streamlined, and initially to ease the competition between programs in filling available positions. While it has changed over the years, the NRMP employs a matching algorithm to match qualified students and programs together. Taking part in the match process requires both the program and the student to enter into a Match Participation Agreement with the NRMP that makes the NRMP’s match a binding commitment. Neither the program, nor the student, can unilaterally break the match, though either party can apply for a waiver of the binding commitment if either side can demonstrate serious or extreme hardship as a result of the match.   

The Match Participation Agreement also designates conduct that constitutes a violation of the agreement, and for those violations, the NRMP can impose some very serious penalties. For example, any incident decided to be a violation by the NRMP will result in a Final Report detailing the participant’s transgressions, which is sent to the applicant’s medical school, the American Board of Medical Specialties, the residency program, the Federation of State Medical Boards, and others. Other possible penalties include being barred from participating in future NRMP Matches for up to three years, or being barred from accepting a position with any residency program that participates in the NRMP Match. For medical students, the Match is just about the only game in town, especially for M.D.’s, and a prohibition from participating in the Match, or from accepting positions in Match-associated programs, has the potential to throw a giant wrench into one’s medical career just as it is getting started. 

The best way to avoid such consequences is to avoid violations of the Match Participation Agreement, which include: failure to provide complete, timely and accurate information during the match process; attempts to subvert the match process; failure to accept an appointment; and any other irregular behavior. The issues that we come across most frequently are an applicant’s alleged failure to provide complete, timely, and accurate information relating to disciplinary action that they faced at some point in their medical education.   If a residency program makes a fuss about the completeness of an applicant’s disclosures, the NRMP can use their broadly worded Agreement to initiate an investigation. As we stated above, the consequences can be great, including banning an applicant from the Match for a term of years (or life), or decreeing that the applicant cannot take a position with a program that participates in the Match.   

If you are a physician Match-applicant who has run afoul of the NRMP, please consider hiring an experienced healthcare law attorney to assist you. The consequences of NRMP sanctions can be great, especially at this formative stage in your career. Contact the healthcare law attorneys at the Leichter Law Firm, PC, at (512) 495-9995.


Starting September 1st, 2013, the Texas Peer Assistance Program for Nurses (TPAPN) will significantly increase the length of their standard monitoring contracts. Previously an RN or LVN participant could expect to sign a two-year participation agreement while an Advanced Practice Nurse or CRNA would be asked to participate for three years. RN/LVN’s and APN/CRNA’s will now need to participate for three and five years, respectively. The new change applies to both nurses who enter TPAPN with or without an accompanying Board Order.

This policy change is probably meant to bring TPAPN more in line with the monitoring programs used by other Texas healthcare licensing agencies. For example, the Professional Recovery Network, which serves as the official peer assistance program for the Texas Pharmacy, Dental, and Veterinary Boards normally asks its participants to sign a five-year agreement. The Texas Physician Health Program also frequently makes use of a five-year agreement, although this can be much longer depending on the case.

While it is understandable why the Texas Board of Nursing would want to increase the standard timeframe for TPAPN participation, I have concerns as to how effective this change will be without corresponding reform of the TPAPN process. My firm has represented hundreds of nurses who have participated in TPAPN both with and without a corresponding Board Order. Many of these nurses have ended up in TPAPN even though they do not have a qualifying substance abuse, chemical dependency, or mental health issue. Usually this is due to the nurse believing they have no other option to retain their license and/or avoid action by the Board. This is oftentimes incorrect and our firm has helped numerous nurses achieve a better result.

This being said, for many nurses participation in TPAPN is a good option. TPAPN does provide a level of structure and direction which can be helpful to someone who is new to sobriety and just learning the tools necessary to remain abstinent. Ideally, this should be accompanied by a supportive and non-punitive atmosphere designed to assist this process. TPAPN’s goal is, and should be, assisting nurses to become and stay sober while monitoring this process through objective indicators such as drug and alcohol screening and regular reports from employers and medical/mental health providers. Unfortunately, it has been my experience that many of TPAPN’s rules and policies are counterproductive to these goals, lead to unnecessary referrals to the Board, and discourage potential participants from enrolling in the program.

Flaws with TPAPN include its policy of refusing to allow a participant to work until they have been cleared by an evaluator and passed a drug and alcohol screen. While sometimes this makes sense, oftentimes it does not as the nurse is already sober and may have been so for some time. This requirement frequently results in the nurse losing their job which significantly undermines their ability to successfully participate both from a sobriety, financial, and mental health standpoint.

TPAPN also prohibits its participants from taking any medication that is potentially abusable even if it is medically indicated, validly prescribed, and completely unrelated to the reason for their participation. For example, a nurse who enrolls in TPAPN due to a history of alcohol abuse but who also has a longstanding and well documented chronic pain syndrome will be asked to discontinue all narcotics. A nurse may also be forced to discontinue psychiatric medications even though these are medically indicated and beneficial. This rule automatically disqualifies a whole range of potential participants who would otherwise be good candidates and can make compliance for existing participants extremely difficult. Continue Reading TPAPN shifts to three-year program for LVN/RN’s and five-year program for APN/CRNA’s


Given the Texas Medical Board’s increasing use of temporary suspension hearings it would be helpful to understand  what repercussions those hearings entail. As we shall see, a temporary suspension not only affects a physician’s medical license it may also affect his Medicare billing privileges and DEA controlled substances registration. A temporary suspension hearing may have been preceded by a temporary suspension without notice. A temporary suspension without notice is essentially a shoot first ask questions later proceeding. The Texas Medical Board first suspends the MD or DO and then later schedules a hearing pending which the physician remains unable to practice. While we strongly recommend that physicians always have legal representation during temporary suspension proceedings, we believe even physicians who are currently temporarily suspended may benefit from legal representation to mitigate the secondary effects.   

Consequences to a physician’s Medicare billing privileges and DEA registration as a result of a without notice temporary suspension proceeding:

As a result of a temporary suspension hearing without notice, the physician’s license will be suspended leaving the physician unable to practice medicine. However, this suspension will only be in effect until a temporary suspension with notice hearing. At this subsequent hearing a panel of the Texas Medical Board may vote to reinstate the physician’s license finding that the evidence is not sufficient to continue the suspension. In the meanwhile, however, the practitioner may still lose his Medicare billing privileges or DEA registration because of the suspension. 

A provider is required under the Medicare regulations to report "any adverse legal action" within 30 days. However, there is a good faith argument to be made that the legal action to be reported must be final and unappealable. A temporary suspension without notice is certainly not a final determination as there must be a subsequent temporary suspension with notice hearing. Additionally it should be noted that the suspension of a medical license is only a "permissive" ground for Medicare exclusion. The physician is not mandatorily excluded from Medicare. An administrative lawyer well versed in Medicare regulations would be helpful in avoiding this undue exclusion during a temporary suspension.

 The DEA is likewise entitled to revoke a person’s DEA controlled substances registration if their medical license has been suspended or revoked. But, as described above, the temporary suspension without notice is short in duration because of the required temporary suspension with notice hearing.  An administrative lawyer can similarly forestall the suspension or revocation of a physician’s registration based on a thorough understanding of the Medical Practice Act’s temporary suspension proceedings.

Repercussions on a physician’s Medicare billing privileges and DEA registration as a result of a suspension with notice hearing.

 After a with-notice hearing the temporary suspension can remain in place for an extended period of time, sometimes over a year. At this point, both Medicare and the DEA may exercise their statutory discretion and rescind the physician’s privileges. However, because the revocation of the physician’s privileges is still not mandatory, a skilled administrative attorney can find a legal basis to maintain the practitioner’s privileges. 

For instance, the physician may appeal the temporary suspension to a Texas district court. This would prevent the temporary suspension from becoming final as it would still be subject to possible reversal. If a physician’s case is particularly strong, he may even move to enjoin the Texas Medical Board from enforcing the temporary suspension pending a final decision. This means that the temporary suspension would no longer have effect and the physician could continue to practice medicine in the interim. If the physician is thus "unsuspended," Medicare and the DEA lose their ability to revoke the physician’s privileges on the grounds that his medical license is suspended. However, these agencies may still institute their own separate investigations and disciplinary proceedings against the physician to independently find grounds to revoke or refuse to renew his privileges. 

A temporary suspension by the Texas Medical Board can have grave consequences for the physician’s Medicare and DEA privileges. Physicians should retain legal representation for the temporary suspension proceedings; However, even after a temporary suspension, a physician should seek legal help from an administrative lawyer to mitigate the secondary damage such as the revocation of Medicare privileges and DEA registration. The lawyer must be familiar with both the Texas Medical Practice Act and the federal statutes and regulations governing Medicare and DEA privileges. 

Our Leichter Law Firm physician licensing defense lawyers have exactly such experience and have been successful in obtaining injunctions against temporary suspensions and forestalling Medicare and DEA revocations. If you are facing temporary suspension or are suffering its aftermath please contact us at (512) 495-9995 to schedule your initial consultation.



The advent of telemedicine has made it possible to provide high quality medical care for underserved areas of Texas. Patients in rural areas now have the opportunity to receive care from the state’s best physicians when before travel costs would have made it impossible. Because of the new nature of telemedicine, state and federal laws and regulations have remained in flux. It is important for any telemedicine provider to be aware of these changes to ensure they remain compliant. 

One of the most significant changes to telemedicine was the passage of the Ryan Haight Act in 2008. The Act places a number of restrictions on the practice of online pharmacies and the ability of practitioner’s to prescribe medications through the internet. It was named after Ryan Haight, a teenager who died of a drug overdose in 2001 from controlled substances he bought from an online pharmacy. Mr. Haight was able to procure a prescription for Vicodin online without ever meeting a doctor.

The Act regulates anyone who delivers, distributes, or dispenses medication by means of the internet. The Drug Enforcement Agency treats a practitioner who prescribes medication following a telemedicine evaluation as covered under the Act. Generally a practitioner is in violation of the act if he or she does not perform at least one in-person assessment of the patient before prescribing medication.

The Act does exempt practitioners from this requirement as long as a practitioner meets the federal definition of practicing telemedicine. A physician practicing telemedicine may prescribe controlled substances without an in-person evaluation if: (1) The patient is treated by, and physically located in a hospital or clinic which has a valid DEA registration; and (2) the telemedicine practitioner is treating the patient in the usual course of professional practice, in accordance with state law, and with a valid DEA registration. 21 USC 802(54)(A). The most important thing to note for a practitioner is that the location where the patient is being treated must be a hospital or clinic that is itself registered with the DEA.

The requirement that the patient be in a hospital or clinic with a DEA registration is more stringent than Texas Medical Board requirements. Under Board rules, a physical, in-person evaluation is not necessarily required to prescribe medication and there is no requirement that the hospital or clinic have a DEA registration. A physician may treat a patient solely through telemedicine as long as the physician creates a physician-patient relationship, the patient is being treated at an “established medical” site, e.g., a clinic or hospital, and all additional requirements are met, including the use of a qualified presenter to examine the patient. Texas law also mandates that a telemedicine provider create and maintain detailed written protocols aimed at preventing fraud and abuse as well as separate policies covering the protection of patient privacy.

There are a number of other special types of telemedicine that under federal law allow a practitioner to prescribe medication without an in person visit, such as practicing telemedicine while working for the Veterans Administration, or receiving a special exemption from the Attorney General. The interaction between federal law and state law in this field is complicated and changing, and made all the more complicated by the piecemeal construction of the Controlled Substances Act.

If you are a physician who is thinking of beginning a telemedicine practice, it is important to seek the advice of experienced counsel to ensure your practice meets all federal and state law requirements.  The applicable law can be complex and involve overlapping mandates on both the state and federal level. In Texas the rules regarding telemedicine continue to evolve as the Texas Medical Board frequently revisits this issue, often with an eye towards making more stringent regulation. The attorneys at the Leichter Law Firm have aided numerous physicians and other providers navigate both state and federal telemedicine law and implement best practices to help avoid the most common problems endemic to this field. In our experience, telemedicine is a complaint rich area where seeking the advice of a qualified attorney prior to being subjected to state or federal scrutiny makes all the difference.



Governor Rick Perry recently made eight appointments to the Texas Medical Board. The Medical Board is responsible for regulating the practice of medicine through licensure, discipline, and education, and is charged with protecting the health, safety, and welfare of the public, according to the Medical Board’s mission statement.  

Four of the appointments are long-standing members of the Medical Board, who have each had their tenures extended to April 13, 2019. These current members included: Michael Arambula, M.D., PharmD, a psychiatrist in private practice, and adjunct professor in the Department of Psychiatry at the University of Texas Health Science Center at San Antonio; James Scott Holliday, D.O., of Dallas, Texas, an anesthesiologist for Pinnacle Partners in Medicine, where he is also the Vice Chairman; Margaret McNeese, M.D., of Houston, Texas, Associate Dean for Admissions and Student Affairs, and professor of Pediatrics at the University of Texas Health Science Center at Houston; and Timothy Webb, J.D., of Houston, who works as an attorney with Webb and Associates, and as an adjunct professor at the University of Houston Department of Health and Human Performance. 

Devinder Bhatia, M.D., of Humble, Texas, was appointed to his first term with the Texas Medical Board. Dr. Devinder specializes in thoracic surgery, peripheral vascular disease, vascular surgery, cardiac surgery, and cardiac disease. He is also a former clinical professor at University of Texas Health Science Center in Houston. 

Another new face to the Medical Board is Frank Denton of Conroe, Texas. Mr. Denton is president of a stock, bond, and real estate investment company called Denton Investment Corp. He was formerly a board member and small business chair of the Texas Association of Business. Additionally, Mr. Denton was a past Board chair of the Texas Department of Licensing and Regulation.   

The Medical Board also now includes Robert B. Simonson, D.O., of Dallas, Texas. Dr. Simonson has practiced emergency medicine in Texas emergency rooms for about 25 years. He is the past president of the Physicians Emergency Care Associated and chair of the Methodist Dallas Medical Center Department of Emergency Medicine. He teaches at University of Texas Southwestern Medical Center and at the University of Texas Arlington School of Nursing. Dr. Simonson is also a board member of the American Board of Emergency Medicine. 

The final appointee is Karl Swann, M.D., of San Antonio, Texas. Dr. Swann practices neurosurgery at Neurological Associates of San Antonio. He is also a clinical assistant professor at the University of Texas Health Science Center at San Antonio’s Center for Neurological Sciences, and was the past chairman of the Methodist Hospital System Department of Neurosurgery in San Antonio. Dr. Swann was appointed to the Texas Rehabilitation Commission in 1998, and to the Texas Health Care Information Council in 2000.    

If you have an investigation or legal case pending before the Texas Medical Board, and want a knowledgeable administrative law attorney, with experience working with the Board and its members, please call the attorneys at the Leichter Law Firm for a free consultation at 512-495-9995.



Over the past few years, the number of fraud investigations and without notice Medicaid payment holds initiated by the Texas Health and Human Services Commission-Office of the Inspector General (THHSC-OIG or Commission) has risen dramatically. This has been accompanied by public outcry on the part of Medicaid providers who have been hit with indefinite payment holds based on little or no evidence, payment holds which can stay in place indefinitely while the Office of the Inspector General conducts its full, and often lengthy investigation.

One of the more important health care bills passed by the 83rd Texas Legislature imparts much needed revisions to the statutes governing the THHSC- Office of the Inspector General’s authority to impose without notice payment holds on Medicaid providers accused of fraud. The statutory changes by the Texas Legislature reflect an intense lobbying effort by Medicaid providers to add greater transparency, clearer standards, and more robust due process to without notice payment holds.

Pursuant to the Patient Protection and Affordable Care Act, more colloquially known as "Obamacare," states are required to withhold Medicaid payments to providers upon receipt of a "credible allegation of fraud." In Texas, responsibility for civil and administrative prosecution of Medicaid fraud rests with THHSC-Office of the Inspector General. Criminal investigation and prosecution for Medicaid fraud falls on the shoulders of the Medicaid Fraud Unit of the Texas Attorney General’s Office. Oftentimes both of these agencies will pursue civil and criminal legal actions in concert.

Prior to the passage of the recent legislation there was no statutory definition of what constituted a "credible allegation of fraud," nor guidance on what kind evidence or preliminary investigation was required before the Office of the Inspector General could impose a without notice payment hold. Because of this, the THHSC-OIG was relatively unfettered in deciding when to impose a payment hold and many Medicaid providers complained this frequently resulted in payment holds being initiated based on little or no evidence of actual fraud.

More importantly, under the prior law a Medicaid provider who was the subject of a without notice payment hold had little to no opportunity to challenge the hold prior to the informal conference or contested case proceeding which would only occur after the completion of a full investigation by THHSC-OIG’s. This full investigatory and administrative process can in many instances take one or more years.

Thus, even if the provider is eventually vindicated, or later settles their case through a partial repayment of the money received from Medicaid, in the interim the provider is denied all Medicaid reimbursement for ongoing care and services. For many providers, such as physician or dental practices catering to Medicaid patients, this is effectively a death sentence as they are forced to indefinitely shoulder the costs of providing care while continuing to pay overhead and satisfy payroll with only an uncertain hope of later reimbursement after their case is resolved and the payment hold removed. The new legislation remedies many of these defects by explicitly defining what constitutes a credible allegation of fraud, outlining the procedure the Commission is required to follow prior to making this determination, and affording an expedited informal conference and/or contested case hearing to a Medicaid provider who is the subject of a without notice payment hold.

Under the new statute distinct definitions are created for both an "allegation of fraud" and a "credible allegation of fraud." Significantly, these definitions make clear that an allegation of fraud can only be deemed credible after a careful case-by-case review that examines all allegations, facts, and evidence; a tip to the fraud hotline, claims data analysis, provider audit, or active law enforcement investigation in-and-of-themselves do not constitute a credible fraud allegation. Although much will depend on how these new standards are implemented by the THHSC-OIG, this is a helpful development as in the past many payment holds have been based entirely on one of the above listed factors which have now been deemed insufficient in the absence of further evidence of fraud.

In addition to better defining what constitutes a "credible allegation of fraud," and perhaps more importantly, what does not, the Texas Legislature now mandates that the Office of the Inspector General conduct a preliminary investigation prior to imposing a payment hold or proceeding to a full investigation. This preliminary investigation culminates in the generation of a report containing the underlying allegation, the evidence reviewed, the procedures used to conduct the investigation, the findings, and a determination of whether a full investigation is warranted. The revised statute also mandates that the Commission retain separate physician and dental directors who must ensure any investigative findings based on the necessity or quality of care be reviewed by a qualified expert. Although the actual impact of these provisions will largely depend on how they are implemented by the THHSC-OIG, ideally these changes will impart additional rigor to the process the Office of the Inspector General uses to screen fraud and abuse allegations for further investigation and the possible imposition of a payment hold.

Of greatest value, the Legislature has afforded Medicaid providers who are the subject of a without notice payment hold an expedited hearings process to either challenge this status or quickly settle their case. The new statutes mandate that the Commission include a recitation of a provider’s procedural rights concurrent with notice that a payment hold has been imposed. These rights include the option to either immediately proceed to a contested case hearing at the State Office of Administrative Hearings within sixty days receipt of the notice letter or convene an informal conference with the option for a later contested case hearing should the informal conference fail to resolve their case. This development is significant as it allows the subject of a Medicaid payment hold to promptly challenge their status. Given this new check on their authority, the THHSC-Office of the Inspector General will likely spend more time building a case for fraud prior to deciding to implement a without notice payment hold.

Based on my experience representing Medicaid providers before the Office of the Inspector General and the Medicaid Fraud Control Unit, I view these statutory revisions as a positive step towards remedying abuses of the payment hold process. I have seen many clients devastated by a without notice payment hold due to the absence of any ready legal means to challenge this status prior to the completion of the Commission’s full investigation. The new definitions and standards applicable to a preliminary investigation should also lead to more deliberation by the THHSC-OIG before the agency decides to initiate a hold.

If you are under investigation for Medicaid fraud or abuse by the Office of the Inspector General, it is imperative to contact an experienced attorney as soon as possible. The threat of a without notice payment hold is very real and the amount of money in controversy is typically significant. Moreover, the OIG often turns these cases over to the Medicaid Fraud Control Unit for possible criminal scrutiny. Medicaid fraud is a serious offense, carries significant prison time, and is often a career ender for a health care provider or business owner. It is crucial to find competent and experienced legal counsel at the very start of the matter as these cases have a tendency to quickly snowball and important legal rights can be unknowingly waived by the client or counsel unfamiliar with the applicable law and OIG process.


During the last month my firm has experienced an influx of calls from nurses who have tested positive for alcohol while on an Order with the Texas Board of Nursing. The consequences of testing positive for a prohibited substance, including alcohol, while under a Board Order can be quite severe. This includes an automatic temporary suspension of the nurse’s license and a high likelihood that this suspension will be continued until the nurse has subsequently obtained twelve consecutive months of sobriety verified by additional random drug and alcohol testing. Moreover, from a legal perspective it is very difficult to mount an effective defense in the face of a positive test and avoid these harsh consequences.

The reason for the sudden increase in nurses testing positive for alcohol appears to be the Texas Board of Nursing’s new decision to include testing for ethyl glucuronide (EtS) and ethly sulfate (EtS) in their screening panel. Previously, the screening company used by the Texas Board of Nursing only tested for ethanol, however, the Board recently signed a contract with a new vendor that includes both EtG and EtS screening in their panel. This is crucial as the sensitivity and detection window of EtG and EtS testing is much higher than a traditional urine ethanol screen.

Ethanol, or alcohol, is the primary intoxicating ingredient in alcoholic beverages. Accordingly, a person who has ingested alcohol will only test positive for ethanol as long as the alcohol remains in their system. Once it has been fully metabolized by the liver, the person will no longer test positive. Given this is a relatively quick process ethanol testing will generally only provide a 10-12 hour window in which to detect if a person has ingested alcohol. If the person has only had one or two drinks, the detection window is even shorter.

In contrast, EtG and EtS testing can detect even light alcohol use over a period of several days. Additionally, these tests, and the low cut-off levels used by the Board, are highly sensitive to even a small amount of alcohol ingetsion. It is also well documented that inadvertent, casual exposure to alcohol in the environment can cause a person to test positive. Sources of incidental exposure to alcohol that can cause positive results include:

  • hand sanitizers containing alcohol;
  • foods containing trace amounts of alcohol;
  • non-alcoholic beers such as O’Doul’s;
  • colognes and perfumes;
  • sustained exposure to gasoline and other chemical agents containing alcohol;
  • mouthwashes containing alcohol such as Listerine and Scope;
  • over-the-counter medications containing alcohol;
  • certain natural and herbal medications.

I am unaware whether the Board has provided nurses testing pursuant to a Board Order with information concerning this new testing panel. Ideally, nurses should also be provided with a list of different substances which can inadvertently cause a positive result. For many years, nurses in the Texas Peer Assistance Program for Nurses been given this information prior to their enrollment in testing and hopefully the Board is doing or will soon be doing the same. This is also the standard of practice for the Texas Physician Health Program and the Professional Recovery Network.

Texas nurses testing through the Board need to be made aware that they are now being tested for EtG and EtS and receive education on how to avoid an inadvertent positive. Whether a nurse who has already tested positive can mount a legal defense is largely dependent on their test level and whether they were positive for both EtG and EtS. A low positive can be an indication of only inadvertent exposure to alcohol while a test that is positive for EtG but negative for EtS strongly suggests either a contaminated sample or the spontaneous production of ethyl glucuronide in the specimen container. In District Court actions, my firm has previously successfully challenged on these bases two automatic suspension orders entered against physicians by the Texas Medical Board.

If you have tested positive for EtG or EtS, it is prudent to contact an attorney with Board experience immediately to explore your legal options. The Board is likely to move quickly to temporarily suspend your license and time is of the essence. Even if a suspension is inevitable, oftentimes an attorney can be useful in negotiating a subsequent Order with the Board that minimizes the amount of time the nurse will be unable to practice.